BMI
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problems with the sale?
Lufthansa
Lufthansa’s BMI Regional Sale Stalls as Buyer Lacks Funds
By Steve Rothwell - Mar 17, 2012 5:15 PM GMT
Deutsche Lufthansa AG (LHA)’s sale of its BMI Regional unit is faltering as the buyer is struggling to raise money for the purchase, according to an e-mail sent to staff by BMI’s chief executive officer.
Lufthansa said Jan. 20 that a deal to sell BMI Regional to an unidentified buyer had been concluded subject to “certain pre-conditions.”
“It was hoped that the sale would have been completed by now but as funding requirements have not been met by the potential buyer, the process has been delayed,” according to the e-mail sent to staff yesterday by BMI CEO Wolfgang Prock- Schauer and seen by Bloomberg News.
The sale of BMI Regional is part of Cologne-based Lufthansa’s effort to divest money-losing British Midland Airways Ltd., known as BMI. International Consolidated Airlines Group SA (IAG), the parent of British Airways, agreed in December to buy BMI for 172.5 million pounds ($273.3 million).
BMI, based at East Midlands Airport in Derby, England, operates three units: BMI, which flies to destinations in the U.K., Europe, the Commonwealth of Independent States, the Middle East and Africa; BMI Regional, a short-haul carrier in the U.K. and Europe; and BMIbaby, a low-cost airline.
As part of the deal, Lufthansa has the option to sell both BMI Regional and its discount carrier BMIbaby, with IAG receiving a “significant price reduction” if BMI fails to dispose of BMIbaby before the deal is completed.
The carrier is in advanced discussions with one of two potential bidders for BMIbaby, according to Prock-Schauer’s e- mail. Lufthansa hasn’t disclosed the names of any of the potential buyers of BMI Regional or BMIbaby.
Regulatory Approval
The sale of BMI to IAG has yet to be approved by European Union regulators, though both airlines said March 15 that they are confident that the deal will receive regulatory clearance and are targeting closing the sale by the end of this month. The European Commission on March 12 extended a deadline to rule on the deal to March 30.
“Regarding BMI Regional we have concluded an agreement with a U.K.-based investor group which is subject to certain pre-conditions which are to be fulfilled,” BMI said in an e- mailed statement today in response to a request for comment.
Andreas Bartels, a Lufthansa spokesman, declined to comment.
Lufthansa’s BMI Regional Sale Stalls as Buyer Lacks Funds
By Steve Rothwell - Mar 17, 2012 5:15 PM GMT
Deutsche Lufthansa AG (LHA)’s sale of its BMI Regional unit is faltering as the buyer is struggling to raise money for the purchase, according to an e-mail sent to staff by BMI’s chief executive officer.
Lufthansa said Jan. 20 that a deal to sell BMI Regional to an unidentified buyer had been concluded subject to “certain pre-conditions.”
“It was hoped that the sale would have been completed by now but as funding requirements have not been met by the potential buyer, the process has been delayed,” according to the e-mail sent to staff yesterday by BMI CEO Wolfgang Prock- Schauer and seen by Bloomberg News.
The sale of BMI Regional is part of Cologne-based Lufthansa’s effort to divest money-losing British Midland Airways Ltd., known as BMI. International Consolidated Airlines Group SA (IAG), the parent of British Airways, agreed in December to buy BMI for 172.5 million pounds ($273.3 million).
BMI, based at East Midlands Airport in Derby, England, operates three units: BMI, which flies to destinations in the U.K., Europe, the Commonwealth of Independent States, the Middle East and Africa; BMI Regional, a short-haul carrier in the U.K. and Europe; and BMIbaby, a low-cost airline.
As part of the deal, Lufthansa has the option to sell both BMI Regional and its discount carrier BMIbaby, with IAG receiving a “significant price reduction” if BMI fails to dispose of BMIbaby before the deal is completed.
The carrier is in advanced discussions with one of two potential bidders for BMIbaby, according to Prock-Schauer’s e- mail. Lufthansa hasn’t disclosed the names of any of the potential buyers of BMI Regional or BMIbaby.
Regulatory Approval
The sale of BMI to IAG has yet to be approved by European Union regulators, though both airlines said March 15 that they are confident that the deal will receive regulatory clearance and are targeting closing the sale by the end of this month. The European Commission on March 12 extended a deadline to rule on the deal to March 30.
“Regarding BMI Regional we have concluded an agreement with a U.K.-based investor group which is subject to certain pre-conditions which are to be fulfilled,” BMI said in an e- mailed statement today in response to a request for comment.
Andreas Bartels, a Lufthansa spokesman, declined to comment.
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So where does this leave us?
I heard another group made an offer for Regional a couple of moths ago, but that was rejected by Lufthansa. If they had money why was it turned away and how have Granite managed to get so far without any money?
The comments from BA don't give a warm fuzzy feeling
I heard another group made an offer for Regional a couple of moths ago, but that was rejected by Lufthansa. If they had money why was it turned away and how have Granite managed to get so far without any money?
The comments from BA don't give a warm fuzzy feeling
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GCE, it would appear that LH have scant regard for people's sensitivities: there are lots of jobs at stake here and the uncertainty can't be good for the staff.
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JCB,
There are a lot of people in ABZ polishing up their cvs and it is only a matter of time before China and the Middle East start looking attractive.
Regional is a tight knit company and this uncertainty is killing it. Granite seem to have had no money through the whole process I am amazed they have been taken seriously by Lufthansa.
There are a lot of people in ABZ polishing up their cvs and it is only a matter of time before China and the Middle East start looking attractive.
Regional is a tight knit company and this uncertainty is killing it. Granite seem to have had no money through the whole process I am amazed they have been taken seriously by Lufthansa.
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Anyone know what is going on? I heard this morning that Granite have funding and 15 minutes later heard they didn't. This is a very worrying time for a lot of people and from what I hear from friends at BA ownership by IAG won't be a pleasant affair.
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Lufty threatens to close down BMI
It infuriates me to see these so called commissions, bureaucrats, call them what you like deciding on the future of a company. Why do these people have to poke their noses into business in this way? What good do they do? What is the point of them?
If it wasn't for them then I'm pretty sure everything would have been sorted out by now, people's futures would have been settled and everyone would know where they stood. Instead we have pure speculation, uncertainty, worry, threats, the list is endless. Above all it's costing the industry a fortune one way or another. LH are loosing money by the day, IAG can't implement their future plans. If Regional and Baby are to be shut down at least notice could be served and employees could look for other jobs, be it integration into IAG or outside the group.
If it wasn't for them then I'm pretty sure everything would have been sorted out by now, people's futures would have been settled and everyone would know where they stood. Instead we have pure speculation, uncertainty, worry, threats, the list is endless. Above all it's costing the industry a fortune one way or another. LH are loosing money by the day, IAG can't implement their future plans. If Regional and Baby are to be shut down at least notice could be served and employees could look for other jobs, be it integration into IAG or outside the group.
22/04 you posted
In the aviation industry, we live in a world market, the competition is based in Asia and the Middle East.
D'Oh
What the EC is doing is buggering up a potential jobsaver.
Screwing this up at a European Level is an own goal.
Not really.
I think we all agree we now live in a single European market.
If that is where we are competition must logically be regulated at a European level.
I think we all agree we now live in a single European market.
If that is where we are competition must logically be regulated at a European level.
D'Oh
What the EC is doing is buggering up a potential jobsaver.
Screwing this up at a European Level is an own goal.
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Neither IAG nor Lufthansa will walk away from this deal, unless it is extended for a ridiculous length of time.
The EC will be aware of the situation and will apply what grains of common sense they may have.....
The EC will be aware of the situation and will apply what grains of common sense they may have.....
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many peoples jobs and future job creation in the uk are on the line with this. The ramifications spread far beyond bmi crew to the wider industry. I choose to believe the comments from known sources that both IAG and lufthansa are on track to achieve a sensible phase one approval. I think the talks to allow a approval is being negotiated on a ongoing daily basis and will be until the early hours of March 30th.
Look who is involved Lufthansa, IAG, German government?, Spanish government? UK government? All very influential and I think the EC need to be seen to regulate to a certain extent. A long 9 days to go
Look who is involved Lufthansa, IAG, German government?, Spanish government? UK government? All very influential and I think the EC need to be seen to regulate to a certain extent. A long 9 days to go
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Would there be the same problems and threat to jobs if LH was selling Swiss? No, because Brussels have no say over business in Switzerland. Isn't this yet another case for leaving that farcical and job threatening (unless you are in an Eurocrat job) 'organisation' called the EU?
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Isn't this yet another case for leaving that farcical and job threatening (unless you are in an Eurocrat job) 'organisation' called the EU?
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Yes to free trade, yes to free movement of people, yes to co-operation with Europe, yes to various shared policy
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I'm not really sure what is 'so Daily Mail' about my analysis, given that it is shared by a wide range of people across the political spectrum and also many like me who incidentally detest that newspaper for its unjustified and unfounded tirades against target organisations and people from the BBC to John Bercow. I'm afraid I just object to my right to democracy being eroded. In answer to your second point, if BA don't get the BMI slots then inevitably we will lose out on trade with developing economies, and so will Europe; if the EC block the deal then they are certainly shooting themselves and their member states in the foot.